TaxTMI 
TaxTMI 
TaxTMI 
2022 (4) TMI 222
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....l and unsustainable on facts and in law. 2. The CIT(A) erred in sustaining the addition of FSA charges of Rs. 45,14,399/- made by the Assessing Officer on the alleged ground that the same relates to prior period item. The authorities below failed to appreciate that the appellant has incurred and paid such expenditure in the previous year relevant to the assessment year under consideration and therefore the said expenditure was allowable. 3. The reliance placed by the authorities below on the judgments cited in the respective orders for making/sustaining addition of FSA charges of Rs. 45,14,399/- is totally misplaced as the said judgments are not applicable to the facts of the appellant's case. 4. The CIT(A) erred in not adjudicati....
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....claring income of Rs. 21,39,750/-. During the course of assessment, learned Assessing Officer found that the assessee has claimed an amount of Rs. 43,35,96/- in the P & L A/c under the head "extra-ordinary item" and that the electricity Fuel Surcharge Adjustment (FSA) charges include electricity charges for the financial years 2010-11 to 2012-13. According to the learned Assessing Officer, insofar as the FSA charges relating to the financial year 2010-11 and 2011-12 pertain to earlier period in respect of which liability had not been crystallized in view of the pendency of the matter before the Hon'ble Supreme Court. He, therefore, observed that the liability of this expenditure depends upon the orders of the Hon'ble Supreme Court a....
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....ting to the A.Y. 2013-14 and therefore, the same is to be allowed. Learned AR submitted that though the FSA charges ere leviable from earlier A.Y., for the first time, the FSA charges were levied by way of bills in the financial year 2012-13 only in which year the assessee took the same into account. He, therefore, submits that in the absence of any allegation that no such expenditure was met, the same cannot be disallowed stating that it relates to the prior period. He further submitted that despite questioning the levy of FSA, the assessee made payment and in case of ultimately, the Hon'ble Supreme Court holds the issue against the assessee it will be offered to tax as income in that year, and because, as on the date the issue is held....
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.... on either side. As could be gathered from the submissions before us on behalf of the assessee, the case of assessee is twofold in this appeal. Firstly, the bills allowing the FSA were issued during financial year 2012-13 followed by the letter dated 7.11.2015 subsequent to the adjudication of the matter by the competent authority and therefore, it is only in the year of crystallization of the liability, the assessee had taken into account, the liability in respect of FSA charges. On this ground, learned AR submitted that such an expenditure is allowable. 9. On this aspect, we find from the paper book at page Nos. 27 to 38 that irrespective of the fact of the FSA coming to force at a much earlier period of time, the liability was crystalli....
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....nd claimed as expenditure during the A.Y. 2013-14. 11. With this view of the matter, we are of the considered opinion that inasmuch as the bills were issued in the financial year 2012-13 and as a result of litigation, the APSPDCL raised the demand on 7.11.2015 for payments of dues up to 06.08.2016 in instalments and the assessee paid such instalments, they are entitled to claim such payments in the A.Y. 2013-14. Observing thus, we restore the issue to the file of the learned Assessing Officer for verification of the amounts paid during the financial year 2012-13 and to grant relief. Grounds 2 & 3 of this appeal are accordingly allowed for statistical purposes. 12. Ground No. 4 relates to the additions u/s. 2(24)(x) r.w.s. 36(1)(va) and ot....